Kenvue third quarter earnings feature a mixed bag for skin health and beauty

Consumer health company Kenvue reports a mixed third-quarter earnings performance, with a decline in skin health and beauty and an earnings surprise exceeding initial quarterly share estimates.

Kenvue’s quarterly earnings came to US$0.28 per share, and it posted revenues of US$3.9 billion for the quarter ending in September. This performance exceeded the Zacks Consensus Estimate of US$0.27 per share. Still, the company reports a 0.4% decrease in net sales and a year-over-year organic growth of 0.9%. Skin health and beauty segments net sales dropped 4.2% to US$1.07 billion in the third quarter.

“In Skin Health and Beauty, while we are not yet where we want to be, we are advancing these focus areas to improve our growth trajectory,” says Thibault Mongon, chief executive officer.

“For 2024, we are on track to invest approximately 20% more than we did last year through advertising, health care professional engagement, in-store prominence and direct consumer engagement with an increasing focus on social media marketing powered by analytics and AI.”

Challenges and opportunities

Mongon cited challenges such as a slow sun care market, an important sector for Kenvue, and continued softness in Asian markets as reasons for a general downturn for the company. Personal Care Insights has reported on the ongoing low consumer sentiment in China and Asia travel that has impacted international luxury brand earnings in the past year.

Looking forward, Mongon emphasized ongoing investments in the back half of the fiscal year, including recent marketing strategy pivots to social media in an effort to draw in Gen Z consumers and younger audiences.

Kenvue, which owns Neutrogena, Aveeno and Listerine brands, spun off from Johnson & Johnson a little over one year ago. 

These quarterly results highlight that the independent company faces the same hurdles as others in the beauty and skin health markets. Kenvue is set to move to a new headquarters in Summit, New Jersey, US, next year and plans to expand the skin health and beauty divisions at this location. 

“As we continue to advance our new Kenvue playbook, our team is making strong progress toward transforming into a leaner, more efficient and agile consumer health organization driving sustainable and profitable growth,” says Mongon.